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Mandatory Compliance for a Private Limited Company in India

Private Limited Company

Before starting any kind of business firm, it is very important to be aware of all of its aspects. And compliances is one of them. Private limited companies in India are required to comply with mandatory regulations. Being unaware of compliance could make you face severe penalties.

What is the Purpose of Compliance? 

The purpose of compliance is to ensure that the companies are following all ethical practices. A private limited company is required to ensure compliance with the various laws including the Companies Act, 2013. It helps in the avoidance of missteps, which is legally unethical and could also cause damage to the company, its directors as well as the economy.

Timely filing of compliance by the companies is very important or higher penalties will be imposed. Regular compliance filing helps the Registrar of Companies to understand how any company is working in a financial year under the rules and regulations of the Companies Act, 2013. Continuity in avoidance of the company’s compliance for a longer period of time shall be a punishable matter for the company with additional fees. 

What is the Compliance of a pvt ltd company?

The most important thing for a Pvt Ltd Company is the Board Meetings. At least two or one third of total directors should be present at the Annual General Meeting (AGM). Its purpose is to discuss the plans and strategies of the company. 

A total of 4 board meetings have to be conducted annually to discuss all the company’s matters. Like, financial statements, management, and techniques of the company. Appointment of an auditor, remuneration, dividend declaration, etc., all this gets discussed in board meetings.

Now let’s discuss about the compliances:

Appointment of the Auditor 

 

(Form- ADT-1)

It is filed to appoint an auditor for the company. It is required to be done within 30 days of the incorporation of the company. If a new auditor is appointed within 15 days from the date of the annual general meeting, the company has to file this form ADT-1 with the RoC.

Form ADT-1 is filed under Section 139(1) of the Companies Act, 2013, which requires the complete details of an appointed auditor for the company. 

Director’s KYC (DIR-3 KYC) 

It is a form used to update the information of all the directors. The Ministry of Corporate Affairs(MCA) purposely took this in charge to be assured of the upgraded details of the directors. It also contributes to the activation of the directors who hold Directors Identification Numbers. KYC of every director needs to be done on the due date of every financial year or else they will be charged a penalty of Rs. 5000 per director.

Due date: September 30th, every year. 

INC- 20A

It is a mandatory form filed with the registrar of companies for the declaration of the commencement of business. The INC-20A carries details about the company’s bank account, directors, share holdings, subscribers’ money, etc. The registrar has the power to strike off the co if this form is not filed within timelines. Due date: Within 180 days of the Incorporation of the company. 

Form MSME

This form is filed with the RoC to inform them about the upgraded details of all the outstanding payments to the small businesses. It is required to be filed on a half-yearly basis. Every company obtaining services or goods from an MSME supplier has to file this form. It is issued under the MSMED Act, 2006, which works to protect the interests of micro or small businesses.

Due dates: October 31st, and April 30th.

Directors’ Disclosure (MBP-1) 

A director needs to file this form in order to disclose his concern about any company. Form MBP-1 requires details about interests, including the shareholding interests of a director in any other organization. 

Due date: June 30th.

Form AOC-4

It is one of the most important compliance for a private limited company. This form is filed to update the financial statements like the audited balance sheet with the RoC. It is done within 30 days from the conclusion of the annual general meeting. 

Due date: October 30, every year. 

Form DPT-3

It is required to be filed by the companies that have received money, and the loan is due. DPT-3 requires information on the return of deposits and non deposits taken by a company. If a company has NIL outstanding balance on March 31st, they are not required to file this form.

Due date: June 30th, every year.

Form MGT-7

This form is issued by the MCA to get updates about the company’s annual returns. MGT-7 requires the total furnished details about the company. It needs to be filed within 60 days from the conclusion of the AGM. Heavy penalties may be imposed along with late fees If a company is found to be not filing this MGT-7 form, then the corporation along with its officers will be imposed with Rs. 5000/- as a penalty.

Due date: November 30th, every year.

Filing compliance is the duty of the board and it must be done timely. The penalties for late filing of the compliance are way higher. Not filing compliance may place the corporation and its directors in a difficult position, and criminal charges may be levied. So it’s better to get it done before the due date.

I’m guessing you’re reading this blog because you’re worried and puzzled about these regulations. Don’t worry, we’re here to assist you. If you own a private limited company and are confused about your company’s compliance, do contact us. JustStart will provide you with thorough assistance. We will provide you with the best suggestions as well as a complete process guide. We have assisted many companies before and got the best results and satisfied customers. JustStart would be delighted to serve you too. Contact us right now!

Related Blog:- How to Get a Private Limited Company Registration Online in India

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